One of the last bastions of state planning is set to open itself further to the free market.

Communist Vietnam is planning to launch its long-awaited stock market in Ho Chi Minh City on 20 July.

Vietnam has been planning to open a stock market for several years, but has repeatedly postponed its launch because of a lack of companies and concerns that it may hurt Vietnam's nascent financial system.

Only two companies have been given permission to float their shares on the market so far. The companies are privatised companies Refrigeration Electrical Engineering, and Cables and Telecommunications Materials.

More companies are expected to list their shares on the market in the future and government and bank bonds will also trade on the new market.

Cashew nut processor Lafooco and transport company Transimex are expected to have permission to list their shares by the opening date.

Trading will be light in the beginning, with sessions taking place on Monday, Wednesday and Friday for three hours a day.

Gradual free-market moves

Vietnam has gradually adopted free-market policies since the collapse of communism in eastern Europe in the late 1980s.

About 400 of 5,900 state-owned enterprises have been sold off under a government privatisation program, which was launched seven years ago.

But officials have been loath to go as far as setting up a stock market.

Bankers said there was foreign interest in the Vietnamese stock market, but said its initial market capitalisation of between just
$20m and $40m would be unlikely to attract many foreign investors.

Investment funds which specialise in Asia may allocate some money to Vietnamese stocks or bonds, one foreign banker said.

"But for others there's still not enough information, in terms of research reports and real market information, to make
intelligent investment decisions," the banker said.

Vietnam is launching its market after investor confidence in Asia was severely shaken by the currency crisis of 1997-98.

Asian stock markets have been on a roller-coaster ride this year, with a sharp recovery in some markets, like South Korea, but international investor confidence still not recovered in many smaller markets.